Is this acceptable?

Question

I'm wanting to get into rental properties. I'm only 19, in university, and have no previous real estate experience. I've been doing a bit of research - here, books, podcasts - wherever I feel is valuable. However, I've hit a bit of a roadblock. I feel I can't start without enough capital for a down payment, closing costs, potential renovations or initial maintenance items, etc. Unfortunately, I'm not sure how much capital I need. I figure I can make a rough estimate if only I knew what property prices to expect, which brings me to my question:

Is it acceptable to reach out to a (or multiple) real estate agent(s) (or broker(s)?), providing my criteria and asking for a vague, "top-of-my-head" estimate? I've done some looking on public listings, but I feel those A) Have poor MDU listings, and B) May not reflect a genuine price.

I look forward to hearing your responses. Cheers! 😊

Nathan Gesner · Answer

Yes, you should be able to sit down with an agent and ask them about what it would take to get started. You can also attend an investor meeting to get an even better idea.

The average home price in Pensacola is $260,000. You would use a conventional loan for a pure rental property, which requires 20% down ($52,000). You can expect at least 2% of the sales price ($5,200) for closing costs, but it could be as much as 5% ($13,000).

Never spend your last dime on an investment because there will be expenses before you have time to build a reserve. I recommend keeping about six months of rent as a reserve $25,000?) until you know more and can define your needs.

Caleb Brown · Answer

Meeting with an agent and lender would be great. Not all would be interested since some want the low hanging fruit but you can find a solid agent and lender who will go over the process and give you a idea of what to expect. From there grind to save and build your credit score. Don't rack up any silly credit cards or auto loans. Focus on getting in your property as fast as possible

Austin Moore · Answer

Hey Zander!

You're already ahead of the game by researching early—great job!

• Estimating Capital Needs – For small multi-family properties, expect:


FHA Loan (3.5% down) if house hacking.


Conventional Loan (15-25% down) if purely investing.


Closing costs (~2-5%) + potential repairs ($5K-$10K+).
• FHA Loan (3.5% down) if house hacking.
• Conventional Loan (15-25% down) if purely investing.
• Closing costs (~2-5%) + potential repairs ($5K-$10K+).
• Reaching Out to Agents – Yes, but find an investor-friendly agent and be upfront. Instead of just asking for estimates, say:


“I’m researching the market—can you provide insights on typical multi-family prices and rents?”
• “I’m researching the market—can you provide insights on typical multi-family prices and rents?”
• Other Research Methods – Check MLS (via an agent), Redfin/Zillow, and local investor meetups for pricing trends.
• Creative Strategies – Consider house hacking, seller financing, or partnering with an investor to get started with less capital.

Estimating Capital Needs – For small multi-family properties, expect:

• FHA Loan (3.5% down) if house hacking.
• Conventional Loan (15-25% down) if purely investing.
• Closing costs (~2-5%) + potential repairs ($5K-$10K+).

FHA Loan (3.5% down) if house hacking.

Conventional Loan (15-25% down) if purely investing.

Closing costs (~2-5%) + potential repairs ($5K-$10K+).

Reaching Out to Agents – Yes, but find an investor-friendly agent and be upfront. Instead of just asking for estimates, say:

• “I’m researching the market—can you provide insights on typical multi-family prices and rents?”

“I’m researching the market—can you provide insights on typical multi-family prices and rents?”

Other Research Methods – Check MLS (via an agent), Redfin/Zillow, and local investor meetups for pricing trends.

Creative Strategies – Consider house hacking, seller financing, or partnering with an investor to get started with less capital.

Keep learning, networking, and analyzing deals—you're on the right path!

Zander S. · Answer

Thanks for all the info! I'm planning to start with home-hacking a 4-unit property with a FHA loan. I'm aiming for ≤10% down - perhaps seller financed. I'm also aiming for a generous reno/mx fund (probably about 5% – really depends on the property!), plus 5% for closing costs. I'd also like to keep a 6-mo fund, like you mentioned!

Is this acceptable?

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